Sensex slips 143 points amidst money laundering fears

The BSE benchmark Sensex fell on Friday by nearly 143 points on heavy selling in private banks, including ICICI Bank and HDFC Bank, following the government's promise that action will be taken if any person is found guilty in the alleged money laundering scam.

After gaining 208 points on Thursday on rate cut hopes, the Bombay Stock Exchange 30-share gauge resumed stable. Soon it moved up to a high of 19,673.16 but started losing momentum after banking shares crumbled under heavy selling. It finally ended at 19,427.56, a fall of 142.88 points or 0.73%.

Reflecting sell-off in the concerned private banks, ICICI Bank, HDFC Bank and Axis bank dropped between nearly 1 to 4%. In New Delhi, financial services secretary Rajiv Takru said both RBI and the ministry are collecting information about the money laundering issue. If facts are established, then whoever is guilty will pay the price, he added.

On Thursday, the country's three largest private banks were accused of indulging in money laundering both within and outside with online portal, Cobrapost claiming that a sting operation conducted by it has revealed a scam.

In 30-scrip Sensex, a total of 18 scrips including RIL, Bharti Airtel, GAIL, L&T, BHEL and Tata Motors fell. However, M&M rose by 1.48%, followed by Tata Power (1.19%) and Hero MotoCorp (0.73%).

Similarly, the NSE 50-issue CNX Nifty also dipped by 36.35 points or 0.62% to end at 5,872.60.

While Asian stocks were mixed, a lower opening in Europe as Eurozone leaders eased constraints on national budgets amid a deepening recession, further influenced the Indian markets.

Meanwhile, the Nalco public offer was fully subscribed before the close of market hours on Friday. Its shares fell 8.81% as government had fixed the sale's floor price at a steep discount.

Dipen Shah, Head - Private Client Group Research, Kotak Securities said, Indian stock market benchmarks fell by more than 1% for the week.

Indices from Hong Kong, South Korea and Taiwan closed with losses while those from China, Japan and Singapore settled with gains.

However, European markets were down in early trade on Friday on profit booking after closing at their highest level in nearly five yearson Thursday. The CAC was down by 0.58%, the DAX by 0.16% and the FTSE by 0.10%.

From the sectoral indices, the S&P BSE-Realty tumbled by 2.81%, followed by S&P BSE Bankex (1.67%), S&P BSE-Oil&Gas (1.18%) and S&P BSE Auto (0.80%). However, S&P BSE-CD rose by 2.49% and S&P BSE-IT by 0.25%.